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in Claremont, CA
Claremont's rental market attracts both traditional homeowners and property investors. Your financing choice depends on whether you're buying to live in or rent out.
Conventional loans work well for owner-occupied properties and investors with W-2 income. DSCR loans ignore your personal income entirely, qualifying you on rental revenue alone.
Conventional loans offer the lowest rates if you have strong credit and verifiable income. You'll need two years of tax returns, pay stubs, and DTI under 50%.
Down payments start at 3% for primary homes, 15% for investment properties. Rates vary by borrower profile and market conditions, but conventionals typically beat non-QM options by 1-2%.
These loans work for investment properties, but underwriters scrutinize your full financial picture. If you own multiple rentals, your DTI calculation gets complex fast.
DSCR loans skip your tax returns and W-2s completely. Lenders care about one number: does the rent cover the mortgage payment?
You need a DSCR ratio of 1.0 or higher, meaning rent equals or exceeds the full PITI payment. Properties with 1.25+ ratios get better pricing.
Expect 20-25% down and rates 1.5-3% above conventional. But if you're self-employed or own multiple rentals, this path often beats trying to qualify conventionally.
Documentation separates these programs. Conventional lenders want everything: tax returns, bank statements, employment letters, rental agreements. DSCR lenders want a lease and an appraisal.
Rate differences matter. Conventional loans run 6-7% for investors right now. DSCR loans start around 8% and climb from there based on your down payment and DSCR ratio.
Qualification logic flips completely. Conventional asks how much you earn and what you owe. DSCR asks what the property earns and ignores your personal finances.
Choose conventional if you have W-2 income, clean tax returns, and DTI under 45%. You'll pay less over the life of the loan, sometimes significantly.
Go DSCR if you're self-employed with write-offs, own multiple rentals, or show low taxable income. Pay the rate premium to skip income documentation entirely.
For Claremont properties specifically, run the DSCR calculation early. If rents barely cover expenses, you won't qualify for DSCR regardless of your income situation.
No. DSCR loans only work for investment properties that generate rental income. You need conventional or another owner-occupied program for a primary home.
DSCR loans typically close in 15-20 days versus 30-45 for conventional. Less documentation means faster turnaround if you need to move quickly.
Yes, but conventional caps cash-out at 75% LTV for investment properties. DSCR programs often go to 80% if the numbers work.
Conventional requires 620 minimum, 740+ for best pricing. DSCR lenders want 660-680 minimum depending on down payment and property performance.
Conventional works for 2-4 units as primary or investment. DSCR handles 1-4 units, all investment only, with each unit's rent counted separately.